Electronic trading systems have one or more networked computers, servers, gateways, processors, and related devices to couple a user (e.g., a trader) to one or more exchanges (also referred to as an electronic exchange, or host exchange). The exchange has one or more centralized computers for receiving, matching and processing orders from traders, other electronic trading systems and/or other exchanges for one or more tradeable objects traded, listed, and/or exchanged at the exchange. The exchange administers information for the tradeable objects and supplies, or broadcasts, the information via a real-time, or substantially real-time, streaming data feed, or other suitable form. The information generally includes at least a portion of an order book and order fill information. Traders may have one or more client devices connected to the electronic exchange for viewing the information and submitting orders.
A tradeable object includes an item or quantity of the item that can be traded, swapped of otherwise exchanged at a price, including but are not limited to, all types of traded events, goods, wares and/or financial product such as stocks, bonds, options, futures, commodities, currencies, repos, indexes, warrants, funds, derivatives thereof, collections or combinations thereof and the like. The tradeable object may be “real,” (i.e., products listed by an exchange), or “synthetic” (i.e., a combination of real products).
The trader may employ one or more trading strategies for entering into trades for one or more tradeable objects. A complex trading strategy (known as a spread), includes simultaneous, or substantially simultaneous, buying and/or selling of one or more tradeable objects (also known as outright markets or legs). A spread may be exchange-defined or synthetic, where an exchange-defined spread is listed and priced as a whole, and a synthetic spread and its parameters are generally identified by the trader. Spreads may be inter- or intra-commodity and include a butterfly, bear, bull, calendar, crack, horizontal, vertical, basis, bundles, packs, strips, straddles, strangles, and ratio spreads.
A trader may use a trading tool to compile and present the information, define parameters of a spread, select a target spread price, enter orders, and re-price or requote working order, in response to changes in the inside market for the hedge to achieve the target spread. The trading tool also may send a hedge order for the hedge leg at the inside market of the hedge leg based on the trader's parameters and/or the trading strategy. If the inside market for the hedge order does not change before the hedge order is received and executed, and there is sufficient quantity available for the hedge order, the hedge order can be filled. A portion of the hedge order that exceeds the quantity available at the inside market may not be filled. In addition, if the inside market changes, the hedge order may not be filled, at least not immediately, if at all. In this instance, the trader, and the spread, is said to be legged, because at least a portion of the hedge order (i.e., leg) did not get filled.
On occasion, a trader may change or adjust a target spread price, or for a legged spread. Because the working orders, hedge orders and fills of working and hedge orders may not be reported, tracked, managed, administered or otherwise recorded as part of a spread trading strategy, the trader may need to account for the legged order. That is, the trader may need to adjust, and/or cancel/replace, the legged order to match a changed target spread price. In this instance, the trader may need to recalculate a new price for the legged order based on the new target spread price other parameters of the spread. Thus, multiple time-consuming steps and additional resources may be necessary for the trader to achieve the new target spread price.
Accordingly, tools to improve assistance for a trader to employ synthetic spread trading strategies are desirable.